Hedge Funds Take in US$3.6bn in November, Reversing Surge of Redemptions in Previous Months

BarclayHedge and TrimTabs Investment Research report that hedge funds took in an estimated US$3.6bn in November, a welcome reversal after redemptions surged to US$9bn in October and hit US$2.6bn in September. Industry assets increased to US$1.7 trillion in November from almost US$1.7 trillion in October, the first increase after five months of declines.

The BarclayHedge Fund Index dipped 0.8% in November after increasing 3.5% in October. That reversal followed five consecutive monthly declines. Despite the increase, hedge fund industry assets stand close to their lowest level since January 2010.

“After months of outflows across nearly every hedge fund category, November saw outflows in only two investment styles: emerging Markets, which shed US$1.3bn, and equity long-short, which shed US$1bn,” said Sol Waksman, founder and president of BarclayHedge.

“November’s numbers are significantly better than October’s, when only five out of the 14 strategies we track showed any inflow and the rest were in the red,” said Leon Mirochnik, analyst at TrimTabs. Heaviest inflows for November were multi-strategy at US$1.5bn (5.75% of assets) and Macro at US$981m (8.5% of assets).

Meanwhile, the latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers reveals growing numbers of fund managers are becoming more bullish and less bearish on US equities. Bullish sentiment on the S&P 500 stands at 42% in December, the second-highest reading this year. Bearish sentiment dropped to 30%, the lowest reading since July 2011, from 36% in November. Managers were markedly bullish in only three months of 2011: January, July, and December.